All The Hype Around SaaS and Subscription = CONFUSION!

Recently I had a call with some folks who were responsible for process improvements in the company's "Quote-To-Cash" processes. They work at a very large software/hardware producer (household name withheld). They asked all kinds of questions, including: 

  • "When is this SaaS stuff going to be mainstream?"
  • "When do I need to get ready for generating phone-bill like invoices in any large amount?"
  • "When is this subscription stuff going to get real (in a meaningful way)?"

The most senior person said, "There is so much buzz—I don't believe any of it."

I then came upon an article in Forbes – The End of ERP – from the CEO of Zuora, Tien Tzuo. The article has statements like "ERP – enterprise resource planning software – is on its deathbed" and "A moment of silence for ERP." As someone who has implemented ERPs for many years, in many countries—for different types of companies—I started laughing.

His point…  I'm referring to the shift we are experiencing away from a 20th century product-based, "buy once" economy to a 21st century services-based "Subscription Economy" centered around recurring customer relationships… Is potentially correct, but it doesn't mean that ERPs are going away.  ERPs run manufacturing floors, maintain financial books, track purchases, etc. Those aren't going to go away just because we're moving to a "subscription economy."

So back to those process improvement folks. What are they supposed to think about this article? They're going to just chuck it to "more buzz" and choose to ignore it. That doesn't help us – the subscription economy is growing and ERPs are here to stay.

By the way, my answer to them was, "You have a while before SaaS and Subscription revenue becomes a large percent of your revenue, but since it's so transformational and affects so many areas – you'll need to start investigating now!" and "We can help you."

View the recent 2011 Key Trends in Software Licensing and Pricing webinar with Amy Konary from IDC for more information on transformational technologies you need to be prepared for.

One comment on “All The Hype Around SaaS and Subscription = CONFUSION!

  1. Xyleme on   # Reply

    SaaS is becoming more popular and the percentage of businesses turning to SaaS solutions continues to rise. There are many benefits associated with SaaS. Perhaps the most appealing factor is that there are less costs associated with it.

Leave a Reply

Your email address will not be published. Required fields are marked *